Wheat prices are still hovering near the lowest level despite the new predictions from the US Department of Agriculture. There is no other reason for the continued weakness, despite the recent forecasts.
Initial forecasts for US wheat production in 2025-2026 have remained consistent, despite global market fluctuations.
Tighter supply
The projections of US ending wheat stocks have been adjusted significantly for the same time period.
The ending stock, or the remaining amount of wheat at the end of the crop after the demand is met, has been slightly revised downward. The minor, but important revision indicates that the US may be facing a tighter situation in terms of supply than originally anticipated.
This downward revision of ending stock is also not isolated. Other major wheat exporting countries have also observed similar adjustments.
The trend is widespread amongst key suppliers globally, and collectively it points towards a possible reduction in the availability of wheat for sale on international markets.
Carsten Fritsch is a commodity analyst for Commerzbank AG. He said that the USDA had significantly revised its forecasts of the US crop upwards.
Wheat is now more competitive in animal feed.
Germans are expressing a bearish outlook
In Germany, a bearish mood for wheat prices has emerged due to the unexpectedly high harvest.
German Cooperative Associations (DRV), reported a wheat crop of 22,4 million tonnes, a 20% rise over the yield last year.
The forecast represents a revision upward of nearly 1 million tonnes from the estimate for July.
The impact of rain during harvest was less than expected, which contributed to the good outlook. Wheat prices were also pushed down by the downward pressure.
Fritsch stated that although there was a small decline in the quality of some characteristics, such as protein and Hagberg numbers falling, it is not quite as bad as originally anticipated.
The harvest has not yet been completed, and the DRV notes that it is too early to make a definitive assessment.
Fritsch said:
The current wheat price weakness is exaggerated, and we expect to see a quick recovery.
Soybean prices jump
Last week, the soybean price saw a significant increase.
Fritsch said that this surge in sales was driven primarily by US President Donald Trump’s optimism about a significant increase in Chinese soybean purchases, combined with USDA’s unexpected reduction of its US crop projection.
A reduction in the soybean area was the primary cause of this unexpected increase in corn acres.
The US crop is expected to come in slightly below the previous estimate of 4.3 billion bushels, despite an upward revision on yields per acre. The revision did not offset the other factors.
Fritsch added:
The strong price trend is due to the fact that we believe Trump’s optimistic view of China’s purchases of soybeans was overblown.
The post Strong German harvest and falling wheat prices threaten to undermine the German harvest, may change as new information becomes available.
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